Bombay High Court
Devendra S/O. Vasudeo Jambhulkar (Lrs. ... vs Additional / Joint Commissioner Of ... on 13 July, 2023
Author: A.S.Chandurkar
Bench: A.S.Chandurkar
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR
WRIT PETITION NO. 5557/2022
Shri Devendra S/o. Vasudeo Jambhulkar
(Legal Heir of Late Vasudeo Damduji
Jambhulkar)
Aged about 39 years, Residing At Plot No.2,
Shivtirth Nagar, Ghogali, Nagpur-440037,
(State of Maharashtra). ----PETITIONER
VERSUS
1. Additional/Joint Commissioner of
Income Tax, Range-4, Nagpur Saraf Chamber,
Mount Road, Sadar, Nagpur.
2. Dy. Commissioner of Income Tax
Circle-4, Nagpur, Saraf Chamber,
Mount Road, Sadar, Nagpur.
3. Additional/Joint/Assistant Commissioner of
Income Tax/ Income Tax Officer,
National Faceless Assessment Centre,
Delhi. ----RESPONDENTS
Mr. R. S. Thakar, Advocate with Mr. S. C. Thakar, Advocate for Petitioner.
Mr. Anand Parchure, Advocate with Mr. B. N. Mohata, Advocate for Respondents.
CORAM : A.S.CHANDURKAR AND MRS.VRUSHALI V. JOSHI, JJ.
RESERVED ON : JULY 07, 2023
PRONOUNCED ON : JULY 13, 2023.
JUDGMENT (PER : MRS.VRUSHALI V. JOSHI, J.)
1. Rule. Rule made returnable forthwith and heard finally with consent of the learned Counsel for the parties.
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2. The petitioner has challenged the notice issued on dead person under Section 148 of the Income Tax Act, 1961 (for short, "the I. T. Act, 1961") dated 31.03.2021. The entire proceedings started from illegal notice on a dead person under Section 147 of the I.T. Act, 1961 and culminating into a reassessment order which is also on dead person raising demand of Rs.5,89,18,411/- are wholly without jurisdiction.
3. The petitioner is the son and legal heir of late Vasudeo Damduji Jambhulkar who was an income tax Assessee having Permanent Account No. PAN : AKAPJ7925K and was assessed by respondent No.2, who was working under the respondent No.1 the Joint Commissioner of Income Tax, Range-4, Nagpur. The father of the petitioner died on 08.07.2020 leaving behind the petitioner as one of the legal heirs. During his life time he had filed the Income Tax Return for the year 2016-17 declaring taxable income of Rs.5,57,090/- and exempt income on sale of agricultural land of Rs.9,31,12,500/- which exempts under Section 10(37) of the I.T.Act, 1961. Full taxes on the said returned income was also paid. Said return was processed under Section 143(1) of the I.T. Act, 1961, however since there was neither any tax payable or refundable, no intimation under Section 143(1) was served on the Assessee. Income Tax returns of late Shri Vasudeo Damduji Jambhulkar for subsequent years viz. 2017-18, 2018-19, 2019-20 were also filed by him while the Income Tax ::: Uploaded on - 14/07/2023 ::: Downloaded on - 14/07/2023 15:36:09 ::: 3/15 wp.5557.22-J.odt Return for the year 2020-21 was (F.Y. 2019-20) filed by the legal heir in the name of the Assessee on 11.01.2021 as the said Assessee had already died on 08.07.2020.
4. The respondent No.2 - DCIT/ACIT Circle 4, Nagpur issued notice under Section 148 of the I.T.Act, 1961 in the name of Assessee Shri Vasudeo Damduji Jambhulkar stating that income chargeable to tax for the year 2016-17 of the Assessee has escaped assessment and accordingly he was called upon to file the return for 2016-17 within 30 days. It was also stated in the said impugned notice dated 31.03.2021 that he has issued this notice after obtaining the necessary satisfaction of the Additional/Joint CIT Range-4, Nagpur.
5. The learned Counsel for the petitioner has urged that the said notice under Section 148 being issued on a dead person was illegal and without jurisdiction on the face of it. The respondent No.3 again issued notice under Section 142(1) of I.T. Act, 1961 on 02.02.2022 in the name of deceased Assessee calling upon to comply with the requirements as stated in earlier notice dated 30.06.2021. The petitioner being legal heir filed brief reply on 07.02.2022 stating that the Assessee had already filed return for the year 2016-17 on 31.03.2018 and enclosed therewith the copy of the said return and computation of total income for the year 2016-
17. Thereafter, again respondent No.3 issued notice on 13.03.2022 in the ::: Uploaded on - 14/07/2023 ::: Downloaded on - 14/07/2023 15:36:09 ::: 4/15 wp.5557.22-J.odt name of the deceased - Assessee. The petitioner submitted reply mentioning that the legal heir of the assessee has submitted the submissions for scrutiny which disclosed that the assessee is no more.
6. The respondent No.3 again in the name of deceased person issued notice under Section 144 of the I.T. Act, 1961 calling upon the said Assessee to show cause as to why the ex parte assessment be not passed as detailed in the said notice dated 27.03.2022. In spite of all these facts and knowing full well that the Assessee Vasudeo Damduji Jambhulkar had died and knowing full well that no notice of reopening of assessment or making assessment can be issued to a dead person and knowing full well that no assessment or reassessment can be made on a dead person. The respondent No.3 passed impugned reassessment order under Section 147 read with Section 144 of the I.T.Act, 1961 on the dead person, which is an absolute nullity and non-est. The issue of impugned notice under Section 148 is illegal as there was neither any information or material validly suggesting and escapement of income.
7. The deceased Assessee during his life time filed the return of his income for assessment year 2016-17 declaring income of Rs.5,57,090/- and exempt income on sale of agricultural land for Rs.9,31,12,500/- under Section 10(37) of the I.T. Act, 1961. The said return was processed and accepted. Thereafter, the respondent No.2 reopened the said assessment ::: Uploaded on - 14/07/2023 ::: Downloaded on - 14/07/2023 15:36:09 ::: 5/15 wp.5557.22-J.odt by issuing notice under Section 148 dated 31.03.2021 on the ground that as per information available with the department, the Assessee sold one immovable property for a consideration of Rs.9,31,12,500/-. This transaction has not been shown by the Assessee in his return of income for the year under consideration and hence he has reason to believe that income chargeable to tax has escaped assessment.
8. Even assuming that the respondent No.2 was not aware of the death of the deceased still that will not validate the notice under Section 148 on dead person as held by the Hon'ble Delhi High Court in the case of Mrs. Sripathi Subbaraya Manohara Vs. Principal Commissioner of Income Tax and Anr. [(2021) 436 ITR P. 469] (Delhi) as under :
"There is no statutory requirement imposing an obligation upon legal heirs to intimate the death of the Assessee ................... consequently whether the permanent account number (PAN) record was updated or not or whether the Department was made aware by the legal representative or not is irrelevant."
9. Even during the reassessment proceedings the legal heirs who filed submission and documents made the respondent No.3 aware of the death of the deceased especially in submission on dated 15.03.2022 and 28.03.2022 still the respondent No.3 passed impugned reassessment order under Section 147 read with Section 144 of the I.T. Act, 1961. Hence, ::: Uploaded on - 14/07/2023 ::: Downloaded on - 14/07/2023 15:36:09 ::: 6/15 wp.5557.22-J.odt prayed to set aside the order passed by the respondent as there is no bar to exercise writ jurisdiction.
10. The respondents have opposed the petition stating that the petitioner has now chosen to challenge the validity of the notice under Section 148 of the I.T. Act, 1961 by this petition only after the orders having gone against him which is untenable in law since the petitioner cannot turn around after participation in the proceedings without questioning the validity of notice. The contentions raised in the petition can also be agitated in the Appellate remedies available under the Act while questioning the validity of assessment order. The petition is not tenable on the ground of availability of alternate remedy.
11. The other ground raised by the petitioner is that the impugned notices were issued in the name of deceased Assessee and therefore, the proceedings are vitiated. The petitioner or anybody on his behalf had never submitted document to demonstrate that the Assessee has expired on 08.07.2020 and in spite of service of notice even death certificate of the deceased Assessee was not furnished. On the other hand, returns for the assessment year 2020-21 have been filed on 11.01.2021 in the name of deceased Assessee and the same were not filed on behalf of legal heirs of the deceased Assessee. The petitioner has miserably failed to point out as to how any of his fundamental rights have been infringed nor ::: Uploaded on - 14/07/2023 ::: Downloaded on - 14/07/2023 15:36:09 ::: 7/15 wp.5557.22-J.odt has pointed out that there was either error of jurisdiction or failure of principle of natural justice. The tenability of the petition itself is in doubt particularly in the light of the decision of the Madras High Court in the matter of Penta-Media Graphic Ltd. Vs. ACIT (2022) Taxman.com.48 Madras). In view of availability of alternate remedy, the petitioner cannot invoke the writ jurisdiction of this Court after inviting impugned order. The petition being devoid of any substance is therefore, liable to be dismissed.
12 We have heard both the parties and considered the documents on record.
13. According to the respondents, the writ petition is not maintainable to challenge the notice under Section 148 of the I.T. Act, 1961 as alternate remedy is available. It is well settled law that an alternative statutory remedy does not operate as a bar to maintainability of a writ petition in at least three contingencies, namely, where the writ petition has been filed for enforcement of the Fundamental Rights or where there has been a violation of the principles of natural justice or where the order or notice or proceedings are wholly without jurisdiction or vires of an Act is challenged. In the present case, the notice dated 31.03.2021 under Section 148 of the I. T. Act, 1961 was issued to deceased assessee after the date of his death (08.07.2020) and thus ::: Uploaded on - 14/07/2023 ::: Downloaded on - 14/07/2023 15:36:09 ::: 8/15 wp.5557.22-J.odt inevitably the said notice could never have been served upon him. Consequently, the jurisdictional requirement under Section 148 of the I.T. Act, 1961, service of notice was not fulfilled. The Hon'ble Delhi High Court in the case of Mrs. Sripathi Subbaraya Manohara Vs. Principal Commissioner of Income Tax and Anr. [(2021) 111 CCH 0099 DelHC] has observed as under :
"9. The objections raised by the learned counsel for the respondents on the maintainability of the present petition, as also on merit, are no longer res integra, having been elaborately discussed and rejected by this Court in its judgment in Savita Kapila (supra) authored by one of us (Hon'ble Mr. Justice Manmohan). Therefore, instead of re- visiting the issues raised, we would merely reproduce the findings given by this Court in its referred judgment:
"AN ALTERNATIVE STATUTORY REMEDY DOES NOT OPERATE AS A BAR TO MAINTAINABILITY OF A WRIT PETITION WHERE THE ORDER OR NOTICE OR PROCEEDINGS ARE WHOLLY WITHOUT JURISDICTION TO INITIATE ASSESSMENT PROCEEDINGS. THE MERE FACT THAT SUBSEQUENT ORDERS HAVE BEEN PASSED WOULD NOT RENDER THE CHALLENGE TO JURISDICTION INFRUCTUOUS.
24. Further, the fact that an assessment order has been passed and it is open to challenge by way of an appeal, does not denude the petitioner of its right to challenge the notice for assessment if it is without jurisdiction. If the assumption of jurisdiction is wrong, the assessment order passed ::: Uploaded on - 14/07/2023 ::: Downloaded on - 14/07/2023 15:36:09 ::: 9/15 wp.5557.22-J.odt subsequent would have no legs to stand. If the notice goes, so does the order of assessment. It is trite law that if the Assessing Officer had no jurisdiction to initiate assessment proceeding, the mere fact that subsequent orders have been passed would not render the challenge to jurisdiction infructuous."
14. Another contention of the respondents is that as the petitioner has responded the notice and participated the proceeding, Section 292 BB comes in picture and the notice issued against dead person can not be a nullity. Section 292 BB reads thus :
"292BB. Notice deemed to be valid in certain circumstances. Where an assessee has appeared in any proceeding or co- operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was --
(a) not served upon him; or
(b) not served upon him in time; or
(c) served upon him in an improper manner: Provided that
nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment."::: Uploaded on - 14/07/2023 ::: Downloaded on - 14/07/2023 15:36:09 :::
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14. A cursory look at Section 292BB would show that the same would apply only to two types of proceedings namely
(i) proceedings, in which, the assessee had appeared and (ii) any inquiry, in which, the assessee had cooperated.
15. In the case on hand, the assessee was dead. It was the assessee's son, who appeared and perhaps cooperated.
Therefore, the primary condition for the invocation of Section 292BB is absent in the case on hand.
16. Section 292BB is in place to take care of contingencies where an assessee is put on notice of the initiation of proceedings, but who takes advantage of defective notices or defective service of notice on him. It is trite to point out that the purpose of issue of notice is to make the noticee aware of the nature of the proceedings. Once the nature of the proceedings is made known and understood by the assessee, he should not be allowed to take advantage of certain procedural defects. That was the purpose behind the enactment of Section 292BB. It cannot be invoked in cases where the very initiation of proceedings is against a dead person."
15. The learned Counsel for the petitioner has relied on the judgment of the Madras High Court in Commissioner of Income Tax Vs. M. Hemanathan [(2016) 95 CCH 0132 ChenHC] where in it has observed as under :
"30. A Bench of this Court, to which, one of us (VRSJ) was a party, had pointed out in Gopalakrishnan G.S. Vs. State of ::: Uploaded on - 14/07/2023 ::: Downloaded on - 14/07/2023 15:36:09 ::: 11/15 wp.5557.22-J.odt Tamil Nadu [2006 (4) CTC 757], that a distinction has always to be maintained between judicial/ quasi judicial proceedings and other proceedings. In Savithriammal Vs. State of Tamil Nadu [2006 (3) MLJ 389], a Division Bench of this Court had categorically pointed out that the notification issued in the name of a dead person is a nullity. In Smt. Lila Vati Bai Vs. State of Bombay [AIR 1957 SC 521], the Constitution Bench of the Supreme Court had carved out an exception.
31. The case on hand will not fall under the said exception. Therefore, the very initiation of the proceedings against the dead person and the continuation of the same despite having noticed the factum of death of the assessee, cannot be approved."
16. The learned Counsel for the petitioner has relied on the judgment of the Gujrat High Court in the case of Jaydeepkumar Dhirajlal Thakkar Vs. Income Tax Officer [(2018) 101 CCH 0085 GujHC].
"In the context of section 292BB of the Act, has held that the same would apply only to two types of proceedings namely -
(i) proceedings, in which, the assessee had appeared; and (ii) any inquiry, in which, the assessee had cooperated."
17. The issue which falls for consideration is as to whether the impugned notice under Section 148 of the I.T. Act, 1961 is issued in the name of dead person said Shri Vasudeo Jambhulkar is enforceable in law. The fact that Shri Vasudeo Jambhulkar died on 08.07.2020 is not ::: Uploaded on - 14/07/2023 ::: Downloaded on - 14/07/2023 15:36:09 ::: 12/15 wp.5557.22-J.odt disputed. The notice issued in the name of the dead person is unenforceable in the eye of law.
18. The respondents seek to justify their stand by contending that they were not intimated about the death of the assessee. The legal heirs did not take any steps to cancel the PAN registration in the name of assessee.
19. It has observed by the Delhi High Court in Savita Kapila Legal Heir of Late Shri Mohinder Paul Kapila Vs. Assistant Commissioner of Income Tax [(2020) 108 CCH 0049 DelHC] as under :
"In the absence of a statutory provision it is difficult to cast a duty upon the legal representatives to intimate the factum of death of an assessee to the income tax department"
"Consequently, the legal heirs are under no statutory obligation to intimate the death of the assessee to the revenue."
20. While informing on mail, the petitioner has mentioned that the legal heirs of the assessee submits the documents which proves that it was sufficient for the respondents to know that the assessee is no more and the legal heirs are submitting the documents. Legal heirs are under no statutory obligation to intimate the death of the assessee to the department. It is also observed by the Delhi High Court in Savita Kapila ::: Uploaded on - 14/07/2023 ::: Downloaded on - 14/07/2023 15:36:09 ::: 13/15 wp.5557.22-J.odt Legal Heir of Late Shri Mohinder Paul Kapila Vs. Assistant Commissioner of Income Tax [(2020) 108 CCH 0049 DelHC] as under :
"32. This Court is of the view that in the absence of a statutory provision it is difficult to cast a duty upon the legal representatives to intimate the factum of death of an assessee to the income tax department. After all, there may be cases where the legal representatives are estranged from the deceased assessee or the deceased assessee may have bequeathed his entire wealth to a charity. Consequently, whether PAN record was updated or not or whether the Department was made aware by the legal representatives or not is irrelevant."
21. The Madras High Court in Alamelu Veerappan Vs. Income Tax Officer [(2018) 102 CCH 0118 ChenHC] has observed as under :
"Nothing has been placed before this Court by the Revenue to show that there is a statutory obligation on the part of the legal representatives of the deceased assessee to immediately intimate the death of the assessee or take steps to cancel the PAN registration."
22. The High Court of Mumbai in Sumit Balkrishna Gupta Vs. Assistant Commissioner of Income Tax [(2019) 104 CCH 0379 MumHC] has observed as under :
"7. The issue of a notice under Section 148 of the Act is a foundation for reopening of assessment. The sine qua non for ::: Uploaded on - 14/07/2023 ::: Downloaded on - 14/07/2023 15:36:09 ::: 14/15 wp.5557.22-J.odt acquiring jurisdiction to reopen an assessment is that such notice should be issued in the name of the correct person. This requirement of issuing notice to a correct person and not to a dead person is not a merely a procedural requirement but is a condition precedent to the impugned notice being valid in law. Thus, a notice which has been issued in the name of the dead person is also not protected either by provisions of Section 292B or 292BB of the Act. This is so as the requirement of issuing a notice in the name of correct person is the foundational requirement to acquire jurisdiction to reopen the assessment. This is evident from Section 148 of the Act, which requires that before a proceeding can be taken up for reassessment, a notice must be served upon the assessee. The assessee on whom the notice must be sent must be a living person i.e legal heir of the deceased assessee, for the same to be responded. This in fact is the intent and purpose of the Act. Therefore, Section 292B of the Act cannot be invoked to correct a foundational / substantial error as it is meant so as to meet the jurisdictional requirement."
23. The learned Counsel for the petitioner has also relied on the judgment in the case of Dharamraj Vs. Income Tax Officer [(2022) 113 CCH 0096 DelHC].
24. The Principal Seat of this Court has recently passed the order in Writ Petition No.10163/2022 (Dhirendra Bhupendra Sanghvi Vs. Assistant Commissioner of Income Tax and Ors.) and has observed that the notice issued on dead persons is null and void.
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25. For the reasons stated above and several High Courts have observed that the notice issued on dead person or re-opening of assessment of a dead person is null and void, this Court holds that the notice and all consequential proceedings in the name of the deceased assessee are null and void and consequentially the impugned notice dated 31.03.2021 under Section 148 of the Income Tax Act is quashed and set aside and all actions in furtherance thereto are prohibited. Hence, the petition is allowed.
26. Rule is made absolute in the aforesaid terms. No costs. (MRS.VRUSHALI V. JOSHI, J.) (A.S.CHANDURKAR, J.) RGurnule ::: Uploaded on - 14/07/2023 ::: Downloaded on - 14/07/2023 15:36:09 :::